Identify who you believe to be Manchester United’s key stakeholders and evaluate their influence in relation to the ethical stance taken by the company.
Ethical stance defined by Johnson and Scholes as: ‘the extent to which an organisation will exceed it minimum obligations to stakeholders and society at large.’Four possible ethical stances exist and are stereotypes for any organisation.
The first ethical stance is short-term shareholder interests; a company who stick very close to laws and regulations which are in place. They give and do only what they are obliged to, this usually causes problems with long-term financial decisions.
The second stance is longer-term shareholder interests – a company who are very focused on building and maintaining reputation in relation to its financial success. They take into consideration all stakeholders and how they can effect the organisation in the future.
The third stance is multiple stakeholder obligations – relating to a company taking wide consultation with all stakeholders. This is a very slow process and not a good stance for a fast moving and growing company.
The last stance is shaper of society – companies who focus on communities and want to build them up; this stance puts the financial interest second and is usually related to charitable organisations.
Manchester United matches the second stance – Longer-term shareholder interests.
They are focused on building reputation using players, clothing, technology, media and many other ways to promote their team and brand. They are known globally using strong marketing methods and this has greatly aided their financial goals.
As a global organisation they have a number of stakeholders, each of these can be categorised into the amount of power and interest they have, using stakeholder mapping. This model is called the Power/Interest matrix (shown below) and indicates the type of relationships held or should be held between stakeholders and the organisation.
INSERT DIAGRAM AS DISCUSSED ABOVEManchester United’s stakeholders can be considered as the following:•Managers•Owners/shareholders•Employees•Customers•Suppliers•Partners/Sponsors•Players •Supporters•Community groups•Investors•Media •GovernmentsStakeholders within segment A are of very little power and interest, Manchester United can keep these stakeholders informed but are not of high importance.
Segment B contains stakeholders of high interest yet low power. They will need to be kept informed and also to a certain degree, need to be kept interested in the teams actions.
Segment C contains stakeholders who have high power and low interest, they are at times content with what is going on but like to be kept informed, at any time these stakeholders can make a drastic change and merge with Segment D.
Segment D are the key players who need to be of high importance to Manchester United, they need to be well informed and satisfied at all times. They will have very strong pulls on decisions and changes being made.
Each stakeholder has individual expectations of the club and a certain degree of power. Not all stakeholders will have power or interest in the team, but they do fit into the Matrix appropriately. I will look at each stakeholder individually and stated where and why they below in the segment they are placed.
Taking into appreciation that the ethical stance, which Manchester United is seen to have, (Longer-term shareholder interests) it’s easier to place each
stakeholder within the matrix. Manchester United work on building a positive and well known reputation and in turn this builds their financial frontier.
Manager’s this includes managers on the football pitch and in stores selling team merchandise. They may have high power within their own domain but within the wider view of the matrix they can have low power and high interest. This places them in segment B. Their interest will be related to performance in their particular areas. The main reason for this interest could be related to promotion and salary.
Owners and shareholders have high interest and high power as they are the main source for profit, falling into segment D. Without the shareholders there would be very low financial statuses and they would not be able to fund their reputation. They have high power in making final decisions and are most important to influence, when looking at corporate governance.
Employees can have very low power and at times low interest in reputation and management. At this stage they would be categorised as segment A. Generally the employees who would fall into this segment would be those who consider the job as a way to pay their bills. They have no real value in the job; if they didn’t work for Manchester United then they would work elsewhere. Football players as employees of the organisation have high power and interest depending on their famous status.
For example in the case study David Beckham would have been placed in segment D as he is a landmark player wanted by almost every football team imaginable. He can use this to his advantage influencing decisions and other stakeholders to his way of thinking.
Investors, Suppliers and community groups are seen, to be kept informed but have little if no power (segment B). Investors in particular want to know if their investment will produce a return, so at times they are not interested in using power or having much interest. Suppliers have little power as the team have a strong demand from others wanting to supply their needs. Just by them being linked to Manchester United makes them more desirable to other companies.
Customers and Supporters are one of the team’s main sources of revenue; most will pay ridiculous amounts for season passes to games home/away and will spend more on memorabilia. They have a high interest in their team and as a result of this they have high power (segment D). Manchester United knows if they make a change that customers and supporters wouldn’t support that it’s not a positive alteration to be made.
Partners and sponsors want to be kept informed of the team’s progress and financial status as they are linked to the reputation of the team. Such partners and sponsors of Manchester United are Vodafone, Nike, Budweiser, Air Asia, Audi and AIG. These companies are related to Manchester United for marketing and financial reasons. They all have high power and high interest. They want them to promote their products in a good light and on a global scale, and they use the team to do so.
If they see the team facing a downfall they can remove themselves and choose another team to promote. This gives them a very high power over the team and influence over decisions (Segment D)The media are highly important stakeholders to keep interested and informed at all times. Media are there to inform all stakeholders about the good and bad even though this can be manipulated at times. This results in the team keeping them very satisfied and informed at the same time (segment D).
After taking into consideration all key stakeholders it’s clear to see, who have the strongest power and or interest, in relation to the ethical stance of Manchester United. Each stakeholder will have their own reasons for using their power and interest and it’s highly important for Manchester United to make sure these stakeholders are kept informed and satisfied with the way the team is managed in all areas of their ethical stance. The stakeholder mapping is can change at any time and needs to be kept in close consideration before and after alterations.
Q2. Critically evaluate how the key cultural characteristics of Manchester United (including values, beliefs and taken for granted assumptions) may have changed from pre -1990 until today. What are the implications of these changes for current and future strategies?After extensive research of Manchester United it’s clear to see a big change in their cultural characteristics from the day they began playing football, to this present day.
The team began in 1878 as a group of workers from Lancashire and Yorkshire railways and they began to play for local leagues and competitions. In 1902 they became an independent organisation called Newton Heath F.C.
Looking at the organisations culture past and present it can be broken down into four layers, shown below:INSERT DIAGRAM AS DISCUSSED ABOVEThis breaks the organisation the Paradigm, Behaviours, Beliefs and Values; looking at each Manchester United has changed dramatically over time.
The early years seen values and beliefs built on players and local communities, concentrating on the game itself and building a reputation for winning against local rivalries. At this time their only taken-for-granted assumptions were that they could win games and not worry about finance resulting in them almost going bankrupt.
From the beginning it’s apparent they loved the game itself and were clearly not financial focused. Brian Oliver commented in a newspaper article online saying “Before 1990 there was no such thing as a sports supplement, it was just about the game and the fans. It was just strong relationship between fans, their families and the players”. This comment proves the team were focused on less material objects; they were there to entertain and have fun.
Their determination was proven after a number of set backs, such as one presented in the case study – The Munich plane crash. This had a huge impact on performance, but they showed they were strong-minded about the game and keeping it alive.
Using the Strategy Lenses theory of Design, Experience and Ideas it’s apparent at this stage the lenses most concentrated on where ideas and design. This was by becoming an independent team and designing the kit and colours which were then modified year’s later.
Looking at the culture web of Manchester United we see a representation of the taken-for-granted assumptions of the organisation and the physical side of their culture (diagram below), this concentrates on the two inner layers of the four layer diagram previously mentioned.
Come 1990 the whole culture of Manchester United changed, they became very focused on the financial side of the game. A real Madrid spokesperson commented “football clubs are marketing brands, not teams…it’s no longer a case of doing well on the pitch; the more merchandise you sell, the better.” Manchester United began to focus on building a global reputation through players, such as David Beckham; so to build a brand. Over the years less and less players from the local communities where being brought on the team and today most players on the team are not from England. The team no longer focused on building the local communities and their young players.
As stated in the case study ‘Manchester United is now marketed as the national team – which has taken it away from the roots and its local community. Football should be a love affair otherwise you are just a business. The big clubs have forgotten their roots and are isolating themselves.’ Also comments of concern regarding the local schools and junior football teams being the next generation of players were being forgotten by the big teams. This information is related to the stories section of the culture web and shows just how the culture has moved form being relaxed to being very fast pace.
The symbol of the team is their kit and logo which can be found anywhere, from online to in your local stores. From 1990 on this symbol has become one of the most recognisable symbols globally. The power structures have changed from being the team players to becoming the stakeholders which in question one fall into the Matrix in section D. These stakeholders have power over the organisation and the way they are run and how their reputation is perceived. The Organisational structure is a typical hierarchy and uses a formal structure of command.
The control systems in Manchester United are focused on finance and go by a corporate governance structure. This is monitors by a number of agents and involves presenting each stakeholder with the correct information at all times in regards to shares, profits and expenditures. The ritual and routines of Manchester United before 1990 were focused on the players and the game itself, making it a family orientated sport. After 1990 the game was about raising revenue and building the best football reputation. This is well illustrated in the case study, by stating the financial figures and share prices and how they have risen.
The future of the team as the case study shows, ‘plans are well advanced in new-media technology, principally the internet and mobile telephone potential.’ They have previously advanced in the service industry by using BSkyB to launch their own satellite channel (MUTV), they have produced a premiere movie, provide banking facilities, introduced sports and leisure facilities along with a clothing brand to match, opened a café, allow weddings on their own Old Trafford grounds and launched an official website. Outside of the case study the future of Manchester united looks positive, with player transfers and progressing into new markets.
In conclusion the cultural characteristics of Manchester United have changed over the years has changed dramatically and in relation to the industry it has evolved very fast. They are a club who works on building a high reputation and keeping it superior to all other clubs who are seen as their rivalries. This was the main focus in the beginning of the organisation but in a different light compared to today, as discussed previously. Their future is aimed towards staying with the ideas and design culture and as for experience it seems to be held on the pitch!
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